During the past year, our efforts have focused on discovery of growth factors related to the bone morphogenetic proteins using degenerate PCR. These proteins are emerging as key determinants in the process of specification of positional information during embryogenesis and have assumed importance to the biotechnology community owing to their almost certain therapeutic utility in a variety of clinical contexts, including nonunion fractures and other orthopedic and reconstructive indications and alveolar ridge augmentation. We have devoted the majority of our attention to genes expressed during gastrulation and neurulation in Xenopus and Brachydanio rerio, though we have also examined genomic DNA from these species. We have found six gene fragments which probably encode heretofore unknown proteins. We have decided to focus on two of these which are most clearly distinct from known proteins. One of these was found in human and bovine cDNA in addition to Xenopus and Brachydanio; this gene demonstrates 95% amino acid identity and 80% nucleotide identity between all four species in the mature expressed protein product. The other shows a similar degree of conservation between Xenopus and Brachydanio; mammalian genes have not yet been identified. We have isolated gt11 cDNA clones by hybridization to the PCR amplification products and anticipate sequencing them during the next few weeks. Next, we will determine the spatial and temporal expression patterns of the genes by hybridization in situ using whole mounts of Xenopus embryos, and investigate their functions by injecting mRNAs transcribed in vitro to induced their over-expression. We will also attempt expression of the proteins in order to explore their effects on differentiation and the expression of trans acting factors (such as the homeobox gene forkhead) in isolated animal caps and to allow identification of specific receptors. Ultimately, we hope this strategy will allow construction of dominant negative genes that can be used to determine the effects of loss of function. PHS 6040 (Rev. 5/92) Several protein sequencing projects were completed or advanced significantly. A novel protein that binds UV damaged DNA specifically was sequenced and cloned; preliminary evidence suggests a possible role in the pathogenesis of Xeroderma pigmentosum. A previously unidentified calmodulin binding protein from mammalian brain was shown to be homologous to C-type phospholipases found in both pathogenic bacteria and protozoa; no mammalian genes with significant primary structure homology are known. Approximately 80% of the sequence was determined by Edman degradation; the gene has now been cloned and expressed. A protein required for the action of the newly- described second messenger cyclic ADP ribose has been identified. Limited data from a highly purified fraction with potent lymphoproliferative activity with characteristics distinguishing it from any known cytokine have been obtained.